Financial and economic data and news from the week ending September 11, 2020

Friday, September 11, 2020
For  the  Week:

S&P500 down 2.5%
   (up 3.4% year-to-date)

Dow Industrials down 1.7%
    (down 3.1%)

Dow Utilities down 0.5%
    (down 7.7%

Dow Transports up 0.5%
    (up 3.5%)

S&P 400 Midcaps down 2.3%
    (down 10.1%)

Small cap Russell 2000
down 2.5%
   (down 10.3%)

Nasdaq100 down 4.6%
    (up 27.0%)

Biotechs down 1.7%
    (up 1.7%).

With gold bullion up $7,
the HUI gold stock index
added 0.5%
    (up 41.1%).


Ten-year US Treasury bond
yields dropped five bps to 0.67%
    (down 125bps year over year).



COMMODITIES:
Bloomberg Commodities Index
declined 1.2%
   (down 11.5% y-t-d).

Gold
added 0.3% to $1,941
   (up 27.8%).

Silver
increased 0.5% to $26.857
   (up 50%).

WTI crude oil
sank $2.44 to $37.33
     (down 39%).

Gasoline
dropped 7.0%
    (down 35%)

Natural Gas
sank 12.3%
    (up 4%).

Copper
declined 0.7%
    (up 9%).

Wheat
fell 1.5%
    (down 3%).

Corn
jumped 2.9%
    (down 5%).



US  MORTGAGE  RATES:
Freddie Mac 30-year
fixed mortgage rates
dropped seven bps
to a record low 2.86%
(down 70bps year-over-year)

Fifteen-year rates
fell five bps
to a record low 2.37%
   (down 72bps y-o-y).

Five-year hybrid ARM rates
 jumped 18 bps to 3.11%
     (down 25bps).

Jumbo mortgage
30-year fixed rates
slipped a basis point
to 3.11%
   (down 121bps).


Federal Reserve Credit
over the past year,
expanded 87%.


M2 money supply
surged 23.3%,
over the past year. 



FOREIGN  STOCKS:
U.K.'s FTSE
surged 4.0%
   (down 20.0%).


Japan's Nikkei
up 0.9%
   (down 1.1% y-t-d). 


France's CAC40
up 1.4%
   (down 15.8%).


German DAX
up 2.8%
   (down 0.3%).


Spain's IBEX 35
down 0.7%
   (down 27.3%).


Italy's FTSE MIB
up 2.2%
   (down 15.7%).


Brazil's Bovespa
down 2.8%
   (down 14.9%)


Mexico's Bolsa
down 0.3%
   (down 16.6%).

South Korea's Kospi
up 1.2%
   (up 9.1%).

India's Sensex
up 1.3%
   (down 5.8%).

China's Shanghai
down 2.8%
   (up 6.9%).

Russia's MICEX
down 0.4%
   (down 4.4%).


Coronavirus:
(1)
September 9
– Reuters:
“India reported record jumps in new coronavirus infections and deaths on Thursday, taking its tally of cases past 4.4 million… In the last 24 hours, 95,735 new infections were detected, with 1,172 deaths accounting for the highest single-day mortality figures in more than a month…”



Other News:
(2)
September 5
– Wall Street Journal (
Alexa Corse and
Chad Day):
“Voters are expected to cast an unprecedented deluge of mail-in ballots. President Trump has questioned the integrity of widespread mail-in voting and the fairness of the electoral process—and whether he will accept the results. His Democratic rival, former Vice President Joe Biden, has accused Mr. Trump of trying to steal the election by alleging voting by mail invites fraud. ... Even after the vote, the outcome of the presidential election might not be known for days or weeks.”



(3)
September 8
– CNBC
(Ryan Browne and
Jessica Bursztynsky):
"Tesla shares were up about 7% in premarket trading Wednesday after closing down 21.06% a day earlier, making it the worst one-day loss on record. ... Tesla shares rebounded in early trading Wednesday, recovering slightly from Tuesday’s steep losses after Elon Musk’s electric vehicle maker was left out of the S&P 500…



(4)
September 8
– Bloomberg:
“TikTok, WeChat and Huawei Technologies Co. are just the beginning. What comes next has the potential to reshape the global economy for decades to come. President Donald Trump’s moves to prevent some of China’s biggest companies from accessing the private data of Americans -- restrictions set to take effect this month -- are part of a broader effort to create ‘clean networks’ the Communist Party can’t touch. That initiative, involving everything from 5G networks to cloud services to undersea cables, is already impacting corporate deal-making and geopolitics, with both countries and companies pressured to pick sides.”



(5)
September 7
– Associated Press
(Andrew Taylor):
“Hopes are dimming for another coronavirus relief bill — or much else. Talks between top Democrats and the Trump administration broke off last month and remain off track, with the bipartisan unity that drove almost $3 trillion in COVID-19 rescue legislation into law this spring replaced by toxic partisanship and a return to Washington dysfunction.”



(6)
September 9
– Reuters
(Doina Chiacu and
Richard Cowan):
“A (new) Republican bill … would provide around $300 billion in new aid for schools, businesses, medical supplies and other coronavirus-related costs. It was drastically scaled down from a $1 trillion plan Republicans offered in July and far from the more than $3 trillion Democrats have been pushing. Democrats are expected to block the Republican bill from advancing…”



(7)
September 9
– Reuters
(David Brunnstrom,
Humeyra Pamuk and
Ryan Woo):
“The United States has revoked visas for more than 1,000 Chinese nationals under a presidential measure denying entry to students and researchers deemed security risks…, a move China called a violation of human rights. The acting head of the U.S. Department of Homeland Security, Chad Wolf, said earlier that Washington was blocking visas ‘for certain Chinese graduate students and researchers with ties to China’s military fusion strategy to prevent them from stealing and otherwise appropriating sensitive research.’”



(8)
September 8
– Bloomberg
(Catarina Saraiva):
“The Federal Reserve’s Main Street Lending Program, aimed at supporting small to mid-size businesses through the coronavirus pandemic, has mostly made loans in the millions of dollars, according data disclosed by the central bank… Of the 118 loans bought by the Fed’s program through the end of August, only 11 were under $1 million. Only one, at $265,000 was close to the $250,000 minimum loan size.”



(9)
September 8
– The Hill
(Niv Elis):
“The federal budget deficit hit an unprecedented $3 trillion in August, with another month to go before the end of the fiscal year, according to estimates from the Congressional Budget Office (CBO).
That figure amounts to $1.9 trillion more than the same period last year,
and more than double the largest yearlong deficit on record… The U.S. has thus far thrown $6 trillion in relief spending at the coronavirus crisis, only half of which was covered by tax revenues and other receipts.”



(10)
September 7
– Financial Times
(Robert Armstrong):
“US banks are increasingly worried about being repaid on loans secured against commercial property, as offices, malls and hotels continue to stand empty. ... criticized loans, which are flashing warning signals about a borrower’s ability to pay. Among the 10 banks with the largest increases, criticized loans rose by 62% in aggregate in the second quarter, but criticized commercial real estate loans rose by 144%, to $26bn… The banks with the largest total increases include JPMorgan Chase, Bank of America and Wells Fargo… Criticised loans at those banks are now equivalent to 9, 13, and 25% of tier one equity capital — the core measure of a bank’s financial strength — respectively, according to S&P Market Intelligence.”


(11)
September 8
– Wall Street Journal
(Jim Carlton):
“Powerful windstorms in California are creating more dangerous conditions as firefighters work to contain wildfires that have already blackened a record 2.3 million acres. Red-flag warnings for high fire conditions were posted across the state, as a forecast for strong winds through Wednesday put pressure on 14,000 firefighters battling 25 major blazes that have killed at least eight people and destroyed more than 3,400 structures.”



(12)
September 11
– Reuters
(Lucia Mutikani):
“The CPI advanced 0.6% in June and July after declining in the prior three months as business closures to slow the spread of the coronavirus depressed demand. In the 12 months through August, the CPI increased 1.3% after gaining 1.0% in July.”



(13)
September 10
– Bloomberg
(John Gittelsohn):
“Mortgage rates in the U.S. dropped to another record low, adding fuel to a housing market that’s been a key source of strength for the pandemic economy. The average for a 30-year, fixed loan was 2.86%, down from 2.93% last week and the lowest in almost 50 years of data-keeping by Freddie Mac.”



(14)
September 8
– Reuters
(Liz Hampton):
“There was 121,000 oilfield jobs lost in the last 12 months…, with employment in the U.S. sector at its lowest level since March 2017. The bulk of those job losses, 103,420, have come since the pandemic began, the report said.”



(15)
September 10
– CNBC
(Robert Frank):
“The number of empty rental apartments in Manhattan nearly tripled compared with last year, as more New Yorkers fled the city and prices declined. There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, according to… Douglas Elliman and Miller Samuel. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago… rentals account for 75% of apartments and that market reacts more quickly to demand changing than the sales market.”



(16)
September 10
– Reuters
(Herbert Lash):
“New York is facing a glut of workspace as
... just 8% of employees have returned
to Manhattan offices as of mid-August,
the Partnership for New York City, a non-profit of nearly 300 chief executives, found in a survey of major city employers.”



(17)
September 11
– Bloomberg
(Liz Capo McCormick and
Alex Tanzi):
"Interest payments in the federal budget declined about 10% in the first 11 months of this fiscal year, when America was running up its biggest deficit since World War II. Over the next few years, servicing the national debt will be cheaper than any time in the past half-century when measured against the size of the economy, according to the Congressional Budget Office.”



(18)
September 6
– CNBC
(Ryan Browne):
“China has lashed out at the U.S. government over potential export restrictions on SMIC, the country’s biggest chipmaker… On Monday, Chinese Foreign Ministry spokesman Zhao Lijian accused Washington of ‘blatant hegemony,’ adding that Beijing was ‘firmly opposed’ to such actions.”



(19)
September 6
– Reuters
(Gabriel Crossley):
“China’s exports rose for the third consecutive month in August, eclipsing an extended fall in imports… Exports in August rose a solid 9.5% from a year earlier…, marking the strongest gain since March 2019. The figure also beat analysts’ expectations for 7.1% growth and compared with a 7.2% increase in July. Imports however slumped 2.1%... China’s trade surplus with the United States widened to $34.24 billion in August from $32.46 billion in July.”



(20)
September 8
– Wall Street Journal
(Jonathan Cheng):
“China’s car sales grew at their fastest rate in more than two years in August, driven by heavy discounts and new-model debuts… Retail passenger-car sales in the country increased by 8.9% last month from a year earlier to 1.7 million vehicles, the China Passenger Car Association said…, marking the strongest rate of growth since May 2018.”



(21)
September 10
– Bloomberg
(Abhishek Vishnoi):
“A crash in Indonesian stocks is evoking memories of market meltdowns in Southeast Asia in the depth of the March swoon. Regional shares slipped on Thursday after Jakarta’s surprise return to a lockdown sent Indonesian stocks 5% lower before triggering a brief trading halt.”



(22)
September 6
– Reuters
(Guy Faulconbridge,
Elizabeth Piper,
William James):
“The European Union told Britain… that there would be no trade deal if it tried to tinker with the Brexit divorce treaty, raising the prospect of a tumultuous end-of-year finale to the saga. In yet another twist to the four-year saga since Britain voted to quit the EU, Prime Minister Boris Johnson’s government was reported to be planning new legislation to override parts of the Brexit Withdrawal Agreement it signed in January. That could jeopardize the whole treaty and create frictions in British-ruled Northern Ireland…”



(23)
September 7
– Financial Times
(Martin Arnold):
“German industrial production rose by less than economists had expected in July, fueling concerns about whether the nascent recovery in the eurozone’s pandemic-stricken economy is running out of steam.  The 1.2% month-on-month rise in German industrial output in July… was the third consecutive month of growth. But it undershot economists’ consensus expectations for a 4.8% increase…”



(24)
September 10
– Reuters
(Leika Kihara):
“Japanese companies plan to make the deepest cut in capital expenditure in more than a decade this year as the coronavirus pandemic hits profits, a government survey showed, underscoring the broadening economic impact of the health crisis… ‘Companies have little choice but to slash spending when their profit outlook is so gloomy,’ said Takeshi Minami, chief economist at Norinchukin Research Institute. ‘Japan could see more companies cut spending and jobs toward the year-end, which means it will take quite a long time for the economy to return to pre-pandemic levels,’ he said.”



(25)
September 11
– Bloomberg
(Crystal Tse):
“Few corners of American finance capture the giddiness of today’s stock market quite like the mad rush into these vehicles, formally known as special purpose acquisition companies, or SPACs… Big-name dealmakers, small-name money managers, tech entrepreneurs, even Paul Ryan, the former speaker of the House and former Trump economic adviser Gary Cohn: all want to raise millions or even billions of dollars via SPACs, which offer nothing more than a promise that they’ll find actual, money-making businesses to buy later. This year, no fewer than 91 SPACs have raised more than $35 billion, approaching half the total raised by SPACs on U.S. exchanges in all previous years.”



(26)
September 8
– CNBC
(Fred Imbert):
“The stock market is in a mania fueled by the Federal Reserve and investor speculation that will end badly in coming years, longtime hedge fund manager Stanley Druckenmiller told CNBC…
‘Everybody loves a party ... but, inevitably, after a big party there’s a hangover,’ the billionaire CEO of the Duquesne Family Office said…
‘Right now, we’re in an absolute raging mania. We’ve got commentators encouraging companies to do stock splits. Companies then go up 50%, 30%, 40% on stock splits. That brings no value, but the stocks go up.’”